The Myth of a Single Retirement Age in Canada
Unlike in the past, Canada has no federal mandatory retirement age [1.7.5]. This means, with few exceptions for specific professions, your employer cannot force you to retire at age 65 [1.7.1, 1.7.2]. The decision of when to stop working is a personal one, influenced by a variety of factors. However, the age of 65 remains a significant benchmark because it's the standard age for eligibility for Canada's two main public pension programs: the Canada Pension Plan (CPP) and Old Age Security (OAS) [1.2.1, 1.2.4]. The average retirement age in Canada was 65 as of 2024, a figure that has been gradually increasing [1.5.1].
Understanding Key Government Pensions: CPP and OAS
Your eligibility and payment amounts from government pensions are the primary reasons specific ages are so important in retirement planning.
Canada Pension Plan (CPP)
The CPP is a contributory pension plan, meaning you and your employer paid into it during your working years [1.3.1]. To qualify, you must be at least 60 years old and have made at least one valid contribution to the plan [1.3.2]. The amount you receive depends on your contributions and when you decide to start taking it.
- Standard Age (65): This is the age at which you can receive your full, unadjusted CPP benefit [1.3.3].
- Early Start (60-64): You can begin receiving your CPP pension as early as age 60. However, your payments will be permanently reduced by 0.6% for each month you take it before age 65, up to a maximum reduction of 36% at age 60 [1.6.2].
- Late Start (66-70): For every month you delay taking CPP after age 65, your payment increases by 0.7%, up to a maximum increase of 42% if you wait until age 70 [1.6.2]. There is no financial benefit to waiting past age 70 [1.3.3].
Old Age Security (OAS)
OAS is a pension available to most Canadians aged 65 or older, funded from the government's general tax revenues [1.4.2]. Your employment history is not a factor [1.4.1]. To receive the full pension, you must have resided in Canada for at least 40 years after turning 18 [1.4.1].
- Standard Age (65): You are eligible to begin receiving OAS payments at age 65 [1.4.1].
- Voluntary Deferral: You can choose to delay your first OAS payment for up to five years, until age 70. This results in a higher monthly payment for the rest of your life [1.4.6]. Each month you defer increases your pension by 0.6%, for a maximum increase of 36% at age 70 [1.4.6].
- OAS Clawback: High-income earners may have to repay part or all of their OAS benefit. This recovery tax applies if your individual net income exceeds a specific threshold, which is adjusted annually [1.2.1].
Early vs. Standard vs. Late Retirement: A Comparison
Choosing when to start your public pensions has a significant impact on your retirement income. The following table compares the implications of starting at different milestone ages.
| Feature | Retiring at 60 (Early) | Retiring at 65 (Standard) | Retiring at 70 (Late) |
|---|---|---|---|
| CPP Benefits | Reduced monthly amount (up to 36% less) [1.6.2] | Full, standard benefit amount [1.3.3] | Increased monthly amount (up to 42% more) [1.6.2] |
| OAS Benefits | Not yet available [1.4.1] | Eligible for standard benefit amount [1.4.1] | Eligible for increased benefit (up to 36% more) if deferred from age 65 [1.4.6] |
| Financial Impact | Longer retirement period to fund, requiring significant reliance on personal savings. | Traditional benchmark; balances pension income with private savings. | Shorter retirement period to fund; maximizes guaranteed government income streams. |
| Key Considerations | Necessary to have substantial private savings (RRSPs, TFSAs). May be chosen for health reasons or lifestyle preferences. | The most common approach, aligning with many workplace pension plan designs. | Requires working longer or having other income sources until age 70, but provides a higher, inflation-protected income for life. |
Factors Influencing Your Personal Retirement Age
Beyond government pensions, your ideal retirement age is a deeply personal calculation. Key factors to consider include:
- Personal Savings: The amount you have accumulated in Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and other investments is crucial.
- Workplace Pension Plans: If you have a defined benefit or defined contribution pension plan from your employer, its rules will heavily influence your decision.
- Health and Life Expectancy: Your current health and expected longevity play a role in deciding whether to take benefits earlier or later.
- Lifestyle Goals: The kind of lifestyle you envision in retirement—and its associated cost—will determine the income you need.
- Debt Load: Entering retirement with significant debt, such as a mortgage, can delay your ability to stop working.
Planning Your Ideal Retirement Timeline
Creating a successful retirement plan requires a structured approach:
- Define Your Goals: Envision what you want your retirement to look like. Do you plan to travel, pursue hobbies, or work part-time?
- Estimate Expenses: Create a detailed budget for your expected retirement lifestyle, accounting for housing, healthcare, travel, and daily living costs.
- Assess All Income Sources: Tally up your projected income from CPP, OAS, workplace pensions, RRSPs, TFSAs, and any other investments.
- Consult a Professional: A certified financial planner can help you analyze your situation, identify any gaps, and create a strategy to meet your goals.
- Apply for Benefits: You must apply to receive your government pensions. You can apply for CPP and OAS online through your My Service Canada Account [1.8.3]. For more information, you can visit the Government of Canada's Public Pensions Webpage [1.8.2].
Conclusion: Your Retirement, Your Choice
There is no single correct answer to "What is the retirement age in Canada?" While age 65 is the traditional benchmark for accessing full pension benefits, the federal government provides significant flexibility. You can start CPP as early as 60 or as late as 70, and you can defer OAS to receive larger payments. The optimal choice depends entirely on your unique financial situation, health, and personal aspirations. Careful planning is the key to ensuring your retirement years are comfortable and secure.
